The Securities and Exchange Board of India has issued notices to six foreign portfolio investors managed by Capital Group — one of the world’s largest asset managers — in connection with an alleged front-running scheme that enabled traders including Ketan Parekh and the Salgaocar family to profit by trading ahead of the FPIs’ large orders.
SEBI’s investigation alleges that sensitive trade information was shared with connected entities before Capital Group’s large buy or sell orders were executed in Indian markets — allowing those with advance knowledge to take positions in the same stocks and profit from the subsequent price movement driven by the institutional flows.
Ketan Parekh — whose name is synonymous with India’s most notorious stock market manipulation episode in the late 1990s and early 2000s — and the Goa-based Salgaocar business family are named as alleged beneficiaries of the information leaks.
Capital Group manages approximately $2.5 trillion in assets globally and is a significant institutional investor in Indian equities through its FPI vehicles.
This is a developing story. Further details on the specific stocks involved, the quantum of alleged front-running gains, and SEBI’s next steps are expected as the investigation progresses.
This article is for informational purposes only.